Staking Hub: Cosmos Stargate Upgrade

Stargate will be the largest Cosmos upgrade yet. On September 10th, 2020, Christopher Goes, Tess Rinearson, and Zaki Manian joined us in Staking Hub to answer all of our questions. 

cosmos stargate

While the Stargate releases of Tendermint Core and the Cosmos SDK are for the entire Cosmos ecosystem (ie. the Cosmos Network), we expect the Cosmos Hub to lead the way as the first chain to adopt the new protocol. As Tess Rinearson (Interchain GmbH) notes, when we talk about the Stargate upgrade, we generally mean the Cosmos Hub.

The Stargate upgrade is expected to deliver a more powerful version of Inter-Blockchain Communication (IBC) than what was originally proposed in the Cosmos whitepaper. Thanks to the work of Christopher Goes (Interchain GmbH), the Agoric team, Tendermint Inc, Informal Systems, and many others, IBC will be more suited to supporting decentralized finance (DeFi) applications.

The Stargate upgrade itself is a feat, as seven distributed teams collaborate to deliver the largest software upgrade in the Cosmos universe.

What’s new?

The Stargate upgrade includes two “flagship” features: protobuf encoding and IBC. We’re also going to see many improvements to the underlying Tendermint consensus (“Tendermint core”), the Cosmos SDK, light client security improvements, and faster synchronization so that nodes can be ready to participate in minutes rather than in days, according to Tess.

One of the biggest changes is that Stargate will enable ATOM holders to do more than stake or trade their ATOMs. ATOMs will be able to move throughout the Cosmos ecosystem, whether that’s paying for container hosting on Akash or lending on a chain that supports collateralized debt positions (CDPs – see MakerDAO).

How? The ICS20 token transfer protocol (the first IBC application protocol launched on the Hub) will enable ATOMs to move to any compatible Cosmos-based chain (like Terra, BandChain, Akash, Secret Network).

What’s so exciting?

Besides enabling sovereign blockchains to exchange data and value, Zaki Manian (Iqlusion) thinks that the most exciting thing about Stargate is that it unblocks Cosmos innovation that requires Hub governance. How?

Governance-minimized Interchain and More

The way that chains interconnect will be more dynamic so that governance proposals aren’t required every time a new chain wants to join the Cosmos Hub. In fact, no governance will be necessary for any part of IBC other than an emergency light client recovery feature or upgrades for the IBC protocol itself. Hub governance can focus on intervening in situations where IBC cannot easily automate failure handling (eg. catastrophic chain forks or light clients timing out), as well as initiatives such as ATOM value accrual. Unlike Polkadot (see parachain auctions), any chain will be able to permissionlessly open an IBC connection with the Cosmos Hub, and Hub validators can whitelist the tokens that they will accept for transaction fees (beyond the ATOM). More thoughts about fees here.

Freeing up Hub Governance for Innovation

Since Hub governance won’t need to control which chains can connect to the Hub, there is a path for rapid iteration of innovation. Zaki mentioned an idea proposed by Billy (Interchain GmbH) called Burner Chains, in which anyone can create short-lived chains that carry real value from the Cosmos ecosystem, such as ATOMs. Not only does governance-minimalized Interchain enable new innovation from chains that can permissionlessly connect to the Hub, it also frees up Hub governance to focus on initiatives such as ATOM value accrual, as per Iqlusion’s ATOM2021 initiative. Part of this initiative is a focus on Ethereum interoperability via Peggy, which means that the ability to exchange value and data with the Ethereum ecosystem is coming soon after Stargate.

How will the Cosmos Stargate upgrade happen?

Stakeholders should be paying attention to the upgrade governance proposals, test the software themselves, and they should ensure that their validators are ready for the new version and for IBC.

The IBC rollout is planned to happen in two stages via on-chain governance. Once the upgrade governance proposal passes in the first stage, the Stargate upgrade will be enacted, and then it will be possible to create IBC clients, connections, and channels. However, cross-chain token transfers will initially be disabled, so a second governance proposal will be required to enable IBC transfers. This way the Cosmos Hub stakers and validators can decide when they think it is safe to allow transfers to take place, similar to the way that the Hub required a governance proposal to enable ATOM transfers at launch.

How will the protocol for IBC be supported? Since IBC relayers do not require many resources, we expect that users will act as their own relayers (via an in-browser relayer), wallets will run relayers for their users, and validators will likely elect to run relayers as a public good. There are many other possible configurations for how IBC relayers will be run.

Want to know more about the upgrade? Follow along here.

The Future of the Cosmos Network

The core IBC protocol in Stargate is fully functional for token and data transfers, but new application protocols like non-fungible token (NFT) transfers or cross-chain accounts could be added in future upgrades using the upgrade module. Perhaps the most exciting aspect of IBC and the Stargate upgrade is that IBC is designed to provide a very flexible building block for a wide variety of applications to use and build upon in many ways, even beyond the vision of the original protocol designers.

We expect other Cosmos-based chains to follow suit with the Stargate upgrade. The network effects of interoperability (ie. exchanging both data and token value) will make upgrading to Stargate attractive, and the tooling should make things easier, faster, and more secure, according to Tess.

Beyond the Cosmos: “Speaking IBC” is Chain Agnostic

We expect IBC to expand beyond the Cosmos ecosystem to be adopted widely. Just like using the Internet, the IBC protocol itself doesn’t require that you use any particular token, pay anyone any money, or connect to anything in particular. You can use the protocol to enact whatever topology you wish and send or receive whatever messages you agree upon with any other blockchains and modules that “speak IBC,” as Christopher says.

IBC implementations are actively in progress in Go (which will be shipped with Stargate), Rust, and Javascript, and others are planned. The Rust implementation will integrate with Polkadot’s Substrate, so parachains and other substrate chains can “speak IBC.”

Bridges are being developed for Bitcoin and Ethereum, and those implementations will translate to other proof-of-work (PoW) chains with similar architectures. Of course it will be up to each individual chain (regardless of framework) to decide what connections to create over IBC and what kinds of application-level interactions to allow, but IBC is a non-contentious standard, and just like the Internet itself, IBC as a protocol could make the blockchain universe a whole lot more connected.

Special Thanks

Special thanks to Chris, Tess, and Zaki for spending an hour with Staking Hub to answer all of our questions! 

Thank you Clay for co-hosting and thanks to our Staking Hub community for all of your wonderful questions.

Feel free to join our Staking Hub Telegram group if you haven’t already. Figment is an avid Cosmos Hub contributor, thanks to staking delegations from you.

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